Lawmakers eye 2.5–3 percent raise for state educators, employees

With high revenues and confidence in the budgets this year, state lawmakers are hoping for what could be as high as a 2.5–3 percent pay raise for K-12 educators and state employees.

Gov. Kay Ivey proposed the pay increase in her first State of the State Address last week but the Governor and other officials have been vague on how large the pay increase could be. State employees haven’t received a cost-of-living pay raise since 2009 and educators haven’t seen one in two years.

Ivey’s proposed Education Trust Fund budget shows an increase of $92 million for cost-of-living raises for educators, which could amount to a little more than a 2 percent raise. An increase of a percentage point for teachers would cost the budget about $40 million.

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State Sen. Gerald Dial, R-Lineville, who has long been influential in state education policy and has carried a hefty role providing oversight for the State Board of Education, said the raises could provide as much a 3 percent increase across the board.

“This is a great education budget, one of the best budgets ever,” Dial said. “We’re going to give the teachers a pay raise, which they deserve. I think it will be somewhere between 2.5 and 3 percent.”

A 3 percent raise would cost the education budget around $120 million a year, and on top of the pay raises, Republicans are also floating a $4 million–$6 million income tax break. Both the increase and the tax break would amount to small portions of the overall $6.6 billion proposed budget, but a larger percentage of this year’s budget increase.

The proposed education budget is $216 million larger than last year’ — a little more than 3.3 percent. On top of the $92 million proposed for pay raises and $6 million for an income tax break, which wouldn’t necessarily reflect on this year’s budget, lawmakers are also set to consider Ivey’s proposals to increase higher education funding by $50 million and appropriations for the state pre-K program by $23 million.

But some Democrats say the increases are not enough.

“I think that is long overdue,” said House Minority Leader Anthony Daniels, D-Huntsville. “We’ve heard a whole lot about that in election years, but we look forward to working with her on that. I wish there was a 5 percent pay raise because back several years ago we increased what educators pay into retirement benefits. We need to get back to those levels.”

Educators still have not returned to their pre-recession pay levels when benefits and insurance costs are taken into account. Lawmakers hope pay increases this year will get them closer to their previous levels.

“I don’t think the question is if, I think the question is how much,” said Sen. Cam Ward, R-Alabaster. “Both teachers and state employees are long overdue for a pay raise.”

Such an increase is made possible by large revenue growth from income and sales taxes, the two largest revenue sources for the education trust fund. The increase has been fueled in large part by solid economic growth in recent years, particularly in the last year as Alabama’s unemployment rate reached record lows.

“When you lower unemployment by 1 percent, you create about $250 million in new revenue,” Dial said. “It’s self-growth. Get jobs, jobs create the money, and the money goes to education. So we’re going to grow our way through this without raising taxes.”

Even the state’s General Fund — typically beleaguered by large requests from the state Medicaid Agency and the Department of Corrections — appears solvent this year. While Ivey is proposing a dramatic increase in funding for the Department of Corrections, Medicaid is believed to need less funding than expected. Lawmakers also set aside more than $90 million in surplus funding last year anticipating larger requests in 2018.

“With the growth we’ve had and the decrease in Medicaid enrollees, that’s giving you that breathing space on the General Fund side. That allows us to deal with the prisons. That allows us to deal with a pay raise,” Ward said. “But we’re not going to be able to do an exorbitant pay raise.”

Ward said the state would need to stay within its means but new revenues does give them “wiggle room” they haven’t had in recent years.

“They haven’t had a pay increase since 2009,” Ward said. “I don’t know of anybody else, any other profession that hasn’t had some sort of cost-of-living adjustment since then. Costs have gone up. Prices have gone up, but their wages haven’t gone up. They do a good job, and they deserve a raise.”

Former Gov. Robert Bentley proposed a 4 percent pay raise for state employees last year but it never came to fruition. Lawmakers instead decided to set aside money in anticipation of unknown costs this year — costs that may end up rearing their head.

Even a small increase for state employees may not be cut and dry. One unknown looms over the prospect of a pay raise for the employees, who would receive that increase out of the state’s General Fund budget.

“There is a huge question mark there, though, and that’s the CHIP program,” said House Speaker Mac McCutcheon, R-Monrovia. “You’re looking at what could be as high as a $60 million ask there to try to supplement that program if the federal government doesn’t continue what they’re doing now.”

Congress failed to re-authorize the program in September, leaving states wondering how they would continue their programs. Alabama was set to disenroll children starting in February but Congress passed a short-term funding bill in December. But that is set to run out in March and lawmakers haven’t been able to agree on a longterm solution.

“We cannot address the budget without having some kind of assurance of whether it’s either going to be taken care of or if we’re going to have to allocate some money for it,” said the speaker, who’s now in his second term as Alabama’s top lawmaker. “That $60 million is a lot of money coming out of that General Fund budget, which we need to keep in mind. We’ll have to work through the process and see.”

House passes General Fund Budget

The Alabama House of Representatives passed the state General Fund Budget on Tuesday.

The General Fund Budget for the 2019 fiscal year is Senate Bill 178. It is sponsored by Sen. Trip Pittman, R-Montrose. State Rep. Steve Clouse, R-Ozark, carried the budget on the House floor. Clouse chairs the House Ways and Means General Fund Committee.

Clouse said, “Last year we monetized the BP settlement money and held over $97 million to this year.”

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Clouse said that the state is still trying to come up with a solution to the federal lawsuit over the state prisons. The Governor’s Office has made some progress after she took over from Gov. Robert Bentley. The supplemental we just passed added $30 million to prisons.

The budget adds $50 million to the Department of Corrections.

Clouse said that the budget increased the money for prisons by $55,680,000 and includes $4.8 million to buy the privately-owned prison facility in Perry County.

Clouse said that the budget raises funding for the judicial system and raises the appropriation for the Forensic Sciences to $11.7 million.

The House passed a committee substitute so the Senate is either going to have to concur with the changes made by the House or a conference committee will have to be appointed. Clouse told reporters that he hoped that it did not have to go to conference.

Clouse said that the budget had added $860,000 to hire more Juvenile Probation Officers. After talking to officials with the court system that was cut in half in the amendment. The amendment also includes some wording the arbiters in the court lawsuit think we need.

The state General Fund Budget, SB178, passed 98-1.

Both budgets have now passed the Alabama House of Representatives.

The 2019 fiscal year begins on Oct. 1, 2018.

In addition to the SGF, the House also passed a supplemental appropriation for the current 2018 budget year. SB175 is also sponsored by Pittman and was carried by Clouse on the floor of the House.

SB175 includes $30 million in additional 2018 money for the Department of Corrections. The Departmental Emergency Fund, the Examiners of Public Accounts, the Insurance Department and Forensic Sciences received additional money.

Clouse said, “We knew dealing with the federal lawsuit was going to be expensive. We are adding $80 million to the Department of Corrections.”

State Representative Johnny Mack Morrow, R-Red Bay, said that state Department of Forensics was cut from $14 million to $9 million. “Why are we adding money for DA and courts if we don’t have money for forensics to provide evidence? if there is any agency in law enforcement or the court system that should be funded it is Forensics.”

The supplemental 2018 appropriation passed 80 to 1.

The House also passed SB203. It was sponsored by Pittman and was carried in the House by State Rep. Ken Johnson, R-Moulton. It raises securities and registration fees for agents and investment advisors. It increases the filing fees for certain management investment companies. Johnson said that those fees had not been adjusted since 2009.

The House also passed SB176, which is an annual appropriation for the Coalition Against Domestic Violence. The bill requires that the agency have an operations plan, audited financial statement, and quarterly and end of year reports. SB176 is sponsored by Pittman and was carried on the House floor by State Rep. Elaine Beech, D-Chatham.

The House passed Senate Bill 185 which gives state employees a cost of living increase in the 2019 budget beginning on October 1. It was sponsored by Sen. Clyde Chambliss, R-Prattville and was being carried on the House floor by state Rep. Dimitri Polizos, R-Montgomery.

Polizos said that this was the first raise for non-education state employees in nine years. It is a 3 percent raise.

SB185 passed 101-0.

Senate Bill 215 gives retired state employees a one time bonus check. SB215 is sponsored by Senator Gerald Dial, R-Lineville, and was carried on the House floor by state Rep. Kerry Rich, R-Guntersville.

Rich said that retired employees will get a bonus $1 for every month that they worked for the state. For employees who retired with 25 years of service that will be a $300 one time bonus. A 20-year retiree would get $240 and a 35-year employee would get $420.

SB215 passed the House 87-0.

The House passed Senate Bill 231, which is the appropriation bill increase amount to the Emergency Forest Fire and Insect and Disease Fund. SB231 is sponsored by Sen. Steve Livingston, R-Scottsboro, and was carried on the House floor by state Rep. Kyle South, R-Fayette.

State Rep. Elaine Beech, D-Chathom, said, “Thank you for bringing this bill my district is full of trees and you never know when a forest fire will hit.

SB231 passed 87-2.

The state of Alabama is unique among the states in that most of the money is earmarked for specific purposes allowing the Legislature little year-to-year flexibility in moving funds around.

The SGF includes appropriations for the Alabama Medicaid Agency, the courts, the Alabama Law Enforcement Agency, the Alabama Department of Corrections, mental health, and most state agencies that are no education related. The Alabama Department of Transportation gets their funding mostly from state fuel taxes.

The Legislature also gives ALEA a portion of the gas taxes. K-12 education, the two year college system, and all the universities get their state support from the education trust fund (ETF) budget. There are also billions of dollars in revenue that are earmarked for a variety of purposes that does not show up in the SGF or ETF budgets.

Examples of that include the Public Service Commission, which collects utility taxes from the industries that it regulates. The PSC is supported entirely by its own revenue streams and contributes $13 million to the SGF. The Secretary of State’s Office is entirely funded by its corporate filing and other fees and gets no SGF appropriation.

Clouse warned reporters that part of the reason this budget had so much money was due to the BP oil spill settlement that provided money for the 2018 budget and $97 million for the 2019 budget. Clouse said they elected to make a $13 million repayment to the Alabama Trust fund that was not due until 2020 but that is all that was held over for 2020.

Clouse predicted that the Legislature will have to make some hard decisions about revenue in next year’s session.

Day Care bill delayed for second time on Senate floor, may be back Thursday

The day care bill, which would license certain day care centers in Alabama, was once again delayed on the state Senate floor after one lawmaker requested more information.

Its brief appearance Tuesday ended with state Sen. Gerald Dial, R-Lineville, saying a compromise had not yet been worked out with the bill’s detractors.

Alabama’s Senate has been hesitant to act on the legislation because of complaints of state Sen. Shay Shelnutt, R-Trussville, who has been an opponent of the bill since its introduction last year. The bill’s delay on Tuesday marks the second time its been taken off the Senate’s agenda.

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The bill has had a rocky time in this year’s session, but the bill’s sponsor state Rep. Pebblin Warren, D-Tuskegee, said she is still confident about its passage out of the Legislature.

Warren, D-Tuskegee, filed the bill this session with the support of influential lawmakers including Gov. Kay Ivey, who told reporters last year that she though all day cares should be licensed.

Mainly sparked by the death of 5-year-old boy in the care of a unlicensed day care worker, the bill had great momentum coming into this year’ session.

Despite the growing support from lawmakers, Religious groups had concerns that the bill would increase state-sponsored reach into religious day cares in churches and non-profit groups.

Warren, proponents, and ALCAP announced a compromise to the bill while it was still in the Alabama House.

Announced by ALCAP originally, the new bill was a weaker version in that it did not require that all day cares in the state be regulated. Instead, religious-based day cares would only need to be registered if they received federal funds. At a Senate committee meeting in February, Warren said a similar requirement was about to come from federal law in Congress.

The bill moved through the House in a overwhelming vote in favor of the proposal and passed unanimously out of a Senate committee a few weeks ago.

Warren, speaking to reporters after its passage from the House, said she was unsure if the bill would encounter resistance in the upper chamber.

It was the Senate that killed the daycare bill last year amid a cramped last day where senators took the bill off the floor. The bill may face similar complications this year, as lawmakers seem to be preparing to adjourn within a few weeks.

Speaking to reporter’s after the committee meeting, Sanford said the decision to file the bill was mainly a philosophical belief that the practice shouldn’t be illegal.

Sanford, a fantasy sports player before its ban, said that fantasy sports are a way to bring people closer together and not a means to win money. The Huntsville senator is not seeking re-election.

The bill’s failure in the Senate follows its trajectory last year too. A similar version of the bill, also sponsored by Sanford, failed in the Senate during the final days of the 2017 Legislative Session.

Since Sanford is retiring, it is unclear if the bill will even come back next session, or if it will even have a Senate sponsor.